Can Disabled Veterans Sue to Enforce a Charitable Trust? Key Insights from Powers v. McDonough
Who This Is For
If you’re a California resident managing a charitable trust, estate plan, or family legacy—or if you’re concerned about protecting vulnerable beneficiaries like veterans, seniors, or disabled individuals—understanding when beneficiaries can enforce trust terms is essential. This landmark Ninth Circuit case clarifies who has the legal right to hold trustees accountable when charitable assets are misused.
What Happened in Powers v. McDonough?
In 2022, a group of unhoused veterans with severe disabilities and mental illnesses sued the U.S. Department of Veterans Affairs (VA) and the Department of Housing and Urban Development (HUD). The veterans sought to restore the West Los Angeles VA Grounds to its original purpose: housing disabled veterans.
The plaintiffs argued that an 1888 deed created a charitable trust and that the VA violated its fiduciary duties by entering commercial leases that failed to primarily benefit veterans. The district court sided with the veterans, but the VA and HUD appealed.
The Ninth Circuit’s Ruling: Special Interest Standing Affirmed
On December 23, 2025, the Ninth Circuit Court of Appeals issued a split decision. While it reversed the lower court’s finding of a breach of charitable trust, it affirmed that the veterans had “special interest standing” to bring the lawsuit.
What Is Special Interest Standing?
Under California law, a charitable trust can be enforced by a person who has a “special interest in the enforcement of the trust.” This legal doctrine balances two competing concerns:
- Protecting trustees from frivolous lawsuits by a large, uncertain class of potential beneficiaries
- Ensuring charitable trusts are properly managed when the Attorney General lacks the resources or information to intervene
Why Did the Court Grant Standing?
The Ninth Circuit found that the disabled, unhoused veterans had a sufficient special interest because:
- The trust’s benefits—supportive housing and healthcare—could mean the difference between life and death for them
- The VA had consistently failed to restore the West Los Angeles VA Grounds to its intended use
- Despite public awareness of these failures, the Attorney General had not taken steps to enforce the trust
This ruling empowers intended beneficiaries to act when government oversight falls short—a principle that extends beyond veterans to other vulnerable groups protected by charitable trusts.
What This Means for California Families and Trustees
For Estate Planning Clients
If you’re creating a charitable trust as part of your estate plan, this case highlights the importance of:
- Clearly defining beneficiaries and trust purposes in your trust documents
- Selecting trustees who understand their fiduciary duties
- Building in accountability mechanisms to prevent misuse of trust assets
For Trustees and Executors
Trustees of charitable trusts in California should know that:
- Intended beneficiaries may have the right to sue if trust assets are mismanaged
- Courts will examine whether trust property is being used for its stated charitable purpose
- Lack of Attorney General enforcement does not shield trustees from accountability
For Beneficiaries of Trusts
If you believe a charitable trust meant to benefit you or your loved ones is being misused, this case provides a legal pathway to enforce your rights—even without government intervention.
How Can I Protect My Family’s Legacy?
Whether you’re setting up a charitable trust, managing an existing estate, or navigating probate in California, the experienced attorneys at California Probate and Trust, PC can help. We offer:
- Free one-hour estate planning consultations to assess your needs
- Clear, straightforward guidance on trusts, wills, and fiduciary responsibilities
- Compassionate support for California residents protecting their families and legacies
Our team has represented thousands of clients across Sacramento, Fair Oaks, and San Francisco. We understand the complexities of California trust law and can help ensure your charitable intentions are legally protected and properly enforced.
Case Summary: Powers v. McDonough
- Case Number: 24-6576
- Court: Ninth Circuit Court of Appeals
- Filed: December 23, 2025
- Key Holding: Intended beneficiaries of a charitable trust with a special interest have standing to sue to enforce the trust
- Source: California Lawyers Association – Powers v. McDonough
- Full Opinion: Ninth Circuit Opinion PDF
Schedule Your Free Estate Planning Consultation
Don’t wait until it’s too late to protect your family and ensure your legacy is honored. Contact California Probate and Trust, PC today to schedule your no-obligation consultation with one of our experienced estate planning attorneys.
Call us at (866) 674-1130 or visit cpt.law/contact-us to get started.